The Citizen Investment Trust (CIT) has unveiled plans to provide loans to stock dealer companies—key institutional players in the securities market—to bolster market stability and growth.  

As part of its investment diversification strategy, CIT also intends to extend loans to private equity and venture capital (PEVC) firms.  

Parbat Kumar Karki, Executive Director of CIT, said preparations are underway for this initiative. “The Citizen Investment Trust Act envisions the trust as a leader in the capital market, and we are aligning our steps accordingly,” he said. “This plan aims to support stock dealer companies, which often cannot sustain operations solely on their own capital, in balancing the securities market.”  

CIT is also looking to increase its activity in the secondary market. “We have been trading general and promoter shares, but we plan to expand debenture investments as well,” Karki added.  

Nagarik Stock Dealer, a CIT subsidiary, has been actively investing in the securities market. The trust plans to extend loans to other stock dealer companies approved by the Securities Board of Nepal (SEBON).  

“In the initial phase, we are working to offer loans ranging from Rs 200 million to Rs 250 million, with a risk assessment process in place,” Karki stated.  

Stock dealers agree that external funding is crucial for market stability.  

Currently, two stock dealer companies operate in Nepal: Nagarik Stock Dealer and Nabil Stock Dealer, with paid-up capital of Rs 3.74 billion and Rs 1.52 billion, respectively.  

Nagarik Stock Dealer distributed a 6.85 percent bonus share from its profits for fiscal year 2021/22. At its second annual general meeting in early 2022, the company proposed issuing 15 million units of shares worth Rs 1.5 billion to the public, but the Initial Public Offering (IPO) process has yet to begin.  

CEO Maheshwarlal Shrestha cited technical challenges for the delay. “A loan from CIT would be highly beneficial, as its terms are more favorable compared to other institutions,” he said.  

Shrestha emphasized that loans from institutions like CIT would boost confidence as stock dealers expand their operations. Nagarik Stock Dealer is also preparing to launch margin lending services, with documents submitted to SEBON for approval six months ago.  

Madan Timilsina, Head of Financial Management at Nabil Stock Dealer, echoed Shrestha’s sentiments. “These loans should be structured to provide maximum benefit to stock dealers,” he said.